MORTGAGE ENJOY THE REVERSE RETIREMENT YOU DESERVE

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1 ENJOY THE RETIREMENT YOU DESERVE REVERSE MORTGAGE WINNER 2018

2 UNLOCK THE EQUITY IN YOUR HOME If you would like the financial ability to spend your retirement how you choose, with independence and dignity, you should talk to us. A Heartland Reverse Mortgage will allow you to borrow against the equity in your home without having to sell it releasing funds for a well-earned and comfortable retirement. This brochure explains what the Heartland Reverse Mortgage is, how it works and how it could help you. If you need more information, please remember we are only a phone call away to answer any of your questions simply call our friendly team on We are here to help you. At Heartland Seniors Finance, we pride ourselves on being the Reverse Mortgage specialist that helps you live a better retirement. Dignity Independence Flexibility Security Peace of Mind Heartland Reverse Mortgage

3 Key points at a glance How a Heartland Reverse Mortgage works 4 Our promises to you 5 Releasing equity with your Heartland Reverse Mortgage 6 Example of a Heartland Reverse Mortgage 7 Heartland Seniors Finance Safeguards 8 Fees and legal requirements 9 Commonly asked questions 10 Important notices 10 About Heartland Heartland Seniors Finance is Australia s leading specialist Reverse Mortgage lender. With an award winning product and dedicated personalised service, Heartland is proud to be the Reverse Mortgage lender of choice for many Australian seniors. Heartland has been awarded Best Reverse Mortgage three years in a row by Money Magazine and won the CANSTAR 2017 Provider of the Year Reverse Mortgages Award. Established in 2004, originally as Australian Seniors Finance, we have helped thousands of people aged 60 and over release home equity to fund a better lifestyle in retirement. Heartland is a leading product innovator in the field of senior s equity release, and over the last decade has played a significant role in the development of public policy and regulation of the Australian Reverse Mortgage market. This regulation, and our commitment, provides our customers with protection and peace of mind. Heartland Seniors Finance is owned by Heartland Bank, an established New Zealand bank with roots stretching back to Heartland Bank provides best or only banking products in three key sectors: Household (including consumer lending, reverse mortgages and motor vehicle lending), Business and Rural. It is listed on the New Zealand stock exchange, has over NZ$4 billion in assets, and is the leading provider of reverse mortgages in New Zealand. Here at Heartland, we believe our commitment to older Australians has been demonstrated over a long period of time. As a specialist provider we pride ourselves on helping senior Australians enjoy the retirement they deserve, with independence, dignity and peace of mind. My Heartland loan enabled me to travel, help family members and purchase a new car. I will be recommending your services to my friends. I have on two occasions sought out Heartland Seniors Finance for a reverse mortgage loan and I have found each time their years of experience has made the process stress free

4 How a Heartland Reverse Mortgage works What is a Heartland Reverse Mortgage? Many seniors are now living in homes that hold much of their wealth. By accessing some of this wealth without having to move, you can do the things you need, or have always wanted to do and live the retirement you deserve. A Heartland Reverse Mortgage enables you to use some of the money tied up in your home without having to sell it by taking out a loan secured against your home. The total loan amount, including accumulated interest, is usually repayable when you move permanently from your home; this could occur when you sell your property, move into longterm care or pass away. You continue to own and live in your home for as long as you wish, benefiting from any potential increase in property values. Making regular repayments is not necessary, although you are free to do so at any time. The amount you can borrow is typically based on your age, property location and the value of your home. A Heartland Reverse Mortgage is designed to help you manage your financial requirements by accessing only what you need, as and when you need it. What can I do with the money? A Heartland Reverse Mortgage is yours for you to do whatever you choose. Many people use the loan to fund home repairs or improvements, repay debt, travel to visit family members, pay for medical procedures, upgrade to a more reliable car, assist with in-home care, or a host of other uses to make life easier and more comfortable. Fundamentally, a Heartland Reverse Mortgage is designed to help you live a better retirement. A Heartland Reverse Mortgage is designed primarily to release funds to improve your quality of life. You Repay Debt? Living expenses should review carefully any proposal that involves borrowing to invest, and we strongly recommend you discuss any such proposal with a lawyer or financial adviser and your family. You should contact Centrelink to discuss any impact borrowing may have on your pension or other government entitlements. Who can apply? Grand Children Anyone aged 60 or over who owns their own home can apply for a Heartland Reverse Mortgage. Secondary Properties A Heartland Reverse Mortgage is also available to be taken over an Investment Property or Holiday Home. Aged Care Option Home Care Home Improvements Travel New Car The Aged Care Option is available for those residing in or moving into permanent long-term care. It has a maximum term of 5 years. Any customers who currently reside in and intend to stay in their home should not consider or select this option. 4 Heartland Reverse Mortgage

5 Our promises to you At Heartland Seniors Finance, we recognise the trust that those taking out the Heartland Reverse Mortgage have placed in us. In return, and provided you meet your obligations under the loan*, we make the following promises: PROMISE ONE Lifetime Occupancy Your home will remain the place you live in for as long as you choose. PROMISE TWO No Negative Equity Guarantee The amount required to repay the loan will never exceed the net sale proceeds of the property. PROMISE THREE Loan Repayment There is no requirement to make any loan repayment until the end of the loan. Our vision is to be Australia s leading provider of funding solutions to seniors. To achieve this we aim to have the best product, best people and best process. This gives our customers peace of mind and enables them to live a better retirement. If you have any questions about your specific situation, or would like further information, please give us a call on We are here to help you Andrew Ford Chief Executive Officer *Subject to complying with the terms and conditions of the Heartland Reverse Mortgage, you will not owe more than the net sale proceeds of your home and you can keep your home for as long as you choose. 100% Committed to the Banking and Finance Oath At Heartland Seniors Finance we are proud to help seniors live a better retirement, with independence and dignity, through our reverse mortgage. We have become 100% committed to The Banking and Finance Oath because of its alignment to our core values of excellence, integrity, trust, teamwork, respect and professionalism. We understand that each and every customer places their trust in us when we provide them with finance. All of our team are BFO signatories and are proud to uphold this trust through treating these customers in a fair and ethical manner. Heartland Reverse Mortgage 5

6 Releasing equity with your Heartland Reverse Mortgage Loan Drawdown Options Only you know how much money you may need at any given time. We offer three options to access your loan with Heartland that can be used in combination: 1. Lump Sum This is the initial advance made to you on settlement. In addition, you may also have a Regular Advance or Cash Reserve facility made available on settlement. 2. Regular Advances Our Regular Advance option enables you to complement your retirement income with a regular advance. This can be done monthly, quarterly or annually over 5 or 10 years and helps many of our customers live a better retirement. 3. Cash Reserve* Our Cash Reserve facility enables you to put aside some funds for future needs, whether that be renovations, travel, health care, to take the stress out of bills or those unexpected expenses. There is no interest charged on any amount of your facility that has not been drawn down. Fees and minimum drawdown amounts apply. Further information can be found on our Product Guide and Fee Schedule. Property criteria The property must be residential, of conventional construction and in good repair. It must also meet our minimum property valuation criteria. The property should be mortgage free, or if there is a mortgage outstanding, it must be repaid with your Heartland Reverse Mortgage. How much can you borrow? The following table above shows the maximum percentage of your home s value (as assessed by an independent valuer) that you can borrow at various ages. The percentage is based on the age of the youngest nominated borrower and the ages are shown below as examples. Standard Reverse Mortgage Age of youngest borrower Aged Care Option Maximum % of home s value available* 60 15% 65 20% 70 25% 75 30% 80 35% 85 40% 90 45% Age of youngest borrower Maximum % of home s value available* 60 20% 65 25% 70 30% 75 35% 80 40% 85 45% 90 50% *Subject to lending criteria, property location and change. If the security property is an Investment Property or Holiday Home, the maximum amount available is reduced by 25%. *Customers can apply to draw on this Reserve at any time. It is not however guaranteed that we will approve this application, as we may reduce or cancel this Reserve. 6 Heartland Reverse Mortgage

7 Example of a Heartland Reverse Mortgage We are often asked how a Heartland Reverse Mortgage adds up over time, and how much equity will remain in the property when the loan is due to be repaid. This depends on a number of factors including interest rate, house price growth and term of loan. We have therefore prepared the following example for a fictitious couple, for illustrative purposes only. When applying for their Heartland Reverse Mortgage, lets assume the couple are: Aged 70 (female) and 73 (male) Own a home we value at $500,000. Drawing a loan of $50,000. The average interest rate during a 15 year loan period is assumed to be 7.5% per annum. The average property growth rate is assumed to be 3% per annum. After 15 years, the graph below shows how the value of the home has increased. The grey area shows how much of that value will be used to repay the Heartland Reverse Mortgage. The graph shows that under a property growth rate of 3% per annum, the value of the property at the end of the loan period exceeds the loan amount by approximately $600,000. It is important to note that this example is a general illustration only and individual experience will be different. Remember, 15 years is simply an example. The Heartland Reverse Mortgage is designed to last as long as required or until you move permanently from your home. A member of our sales and service team can prepare a tailored calculation for you if required. $1,000,000 $875,000 $750,000 House Value $625,000 $500,000 $375,000 Equity $250,000 $125,000 $0 Debt Loan Amount IMPORTANT: The example given is for illustrative purposes only and assumes a fixed interest rate of 7.5%p.a. compounded monthly, with no fees or charges applying and no repayments being made. The interest rate used is an example for illustrative purposes only, and is not intended to be indicative of the interest rate offered by Heartland Seniors Finance. Different interest rates may apply. Please contact Heartland Seniors Finance for current interest rates. Lending criteria, terms and conditions, fees and charges apply. Different loan amounts, interest rates, terms and conditions, and fees and charges, will result in different repayment amounts. No assurance can be given that property values will increase, and property values may also decline. Heartland Reverse Mortgage 7

8 Heartland Seniors Finance Safeguards As well as our three promises, there are a range of other features and protections we have put in place to help ensure you are comfortable with your decision to take out a Heartland Reverse Mortgage. Ownership of your home You retain ownership of your home at all times, and continue to benefit from any increase in property value. Equity Protection Option Under the Equity Protection Option you may choose to protect a percentage of the eventual net sale proceeds of the property (10%, 20% or 50%). When your loan is repaid, you or your estate are guaranteed to receive any chosen Equity Protection percentage. For example: You choose to protect 20% of your home and the net sale proceeds when you sell are $500,000. As long as you meet your obligations under the loan, the maximum that you or your estate would be required to pay us would be $400,000, even if the loan balance on your loan was higher than this amount. Loan approval, terms and conditions, fees and charges apply. Please be aware that by choosing the Equity Protection Option this will reduce the loan amount available by the percentage selected. Independent financial advice and family involvement We strongly recommend that you first discuss with your financial adviser and family when considering a Heartland Reverse Mortgage. Your obligations under the Loan In order for us to keep our promises, you will have a number of legal obligations to us. These include continuing to live in and look after your home, making necessary repairs as required and protecting it from damage. You will also need to continue to pay your rates and adequately insure your property. If you do not meet your obligations under the loan, Heartland may be unable to honour its promises to you. Other Occupiers If you have a spouse or partner, they need to be party to the loan. This ensures they benefit from the promises and protections our loan offers. Additional occupiers in your property, such as children or a carers, are permitted. However, they will be required to sign an acknowledgement confirming that they understand the Lifetime Occupancy Promise will not apply. Independent legal advice It is a requirement that you seek and receive independent legal advice on the loan agreement issued by Heartland from a solicitor of your choice. 8 Heartland Reverse Mortgage

9 Fees and legal requirements Settlement and other fees There will be fees applicable in setting up your Heartland Reverse Mortgage. Details of these can be found on our Fee Schedule and website Other costs involved include Government charges and your own solicitor s legal work. Legal work Heartland Seniors Finance retains its own legal advisers, and you are not required to pay additional fees to cover Heartland Seniors Finance legal work. To protect your interests, your own legal adviser should act for you. Your solicitor will advise you of their fees for completing the necessary legal work. You will be responsible for your own solicitor s fees, including the required independent legal advice. Interest rates Like any other loan, interest will be charged on your Heartland Reverse Mortgage. Interest will be charged at our applicable published variable interest rate and will be added to the amount you have borrowed to form the overall loan balance. Interest is calculated on the daily balance, compounded and debited monthly to your loan account and repaid, together with the principal, at the end of the term of the loan. Being a variable interest rate, it is subject to change. Should the interest rate change, we will publish these changes in a national newspaper, on our website and also detail the new interest rate on your next statement. Keeping track To help you monitor your loan, we will send you a statement every six months detailing the transactions on your loan over the previous period, including interest and any applicable fees and charges. Heartland Reverse Mortgage 9

10 The Heartland Reverse Mortgage - commonly asked questions Will I still own my home? Yes, you will always own your home and continue to live in it as you do now. Only when you move permanently from your home (or in the case of joint applicants, when both of you have moved permanently from your home) will the loan be repayable. You can stay in your home as long as you wish and continue to benefit from any capital growth. How do you value my home? To allow us to establish the value of your home, and therefore calculate how much you could be eligible to borrow, we will need to assess the value and condition of the property. We will arrange for a registered valuer to visit your home to assess its value. A copy of this assessment will be provided to you. How and when is my loan repaid? With a Heartland Reverse Mortgage you do not need to make regular repayments. The total loan amount, including accumulated interest, is usually repayable when you move permanently from your home; this could occur when you sell your property, move into long-term care or pass away. The loan is usually repaid from the sale proceeds of your home, and the balance is then retained by you or your estate. Although the Heartland Reverse Mortgage is designed to last for as long as you wish to keep your home, you may repay all or part of your loan at any time without penalty, providing you with flexibility. Can I increase my loan amount? When your Cash Reserve facility (if any) is fully drawn you can apply to increase your total loan amount. Increases are based on the age of the youngest person, the current property value and the total loan balance, at the time of application. Fees will apply and a new valuation of your home may be required. This will be confirmed at the time of application. Property ownership Some customers (who we call Nominated Borrowers) may not be the sole owners of the home they live in. In these circumstances Heartland Seniors Finance will need to be contacted to ensure the application can proceed. What if I move house? If you move into another house, you can apply to transfer your Heartland Reverse Mortgage to your new home. If we agree to this loan transfer, fees will apply and will be added to your loan balance. Can I rent out the security? If the loan is initially taken out over your investment property you are able to rent out your home subject to the lease meeting Heartland s requirements. If your wish to lease out your owner occupied home, please contact Heartland to discuss your situation. This is not always possible and is based on your specific circumstances and loan conditions. 10 Heartland Reverse Mortgage IMPORTANT NOTICE: This Information has been prepared without taking account of the objectives, financial situation or needs of any particular individual. For this reason, any individual should, before acting on this information, consider the appropriateness of the information having regard to their individual objectives, financial situation and needs and, if necessary, seek appropriate professional, financial and taxation advice.

11 What s the next step? If you d like to know more, please call us any time. We will be able to answer any additional questions you may have. Call us on enquiries@seniorsfinance.com.au Website: I am very grateful you took on our loan issue. I would have been totally lost without you. No one was getting back to me at all, regardless of any paperwork sent in, except you. I can t express how amazing you have been. You made a difference. Compliments & Complaints Heartland is proud to offer customers a high level of service, and your satisfaction is very important to us. If you wish to provide feedback, we encourage you to contact us. In the first instance please get in touch with your usual point of contact. You can also contact our friendly team on or feedback@seniorsfinance.com.au. We are here to help you. Heartland Reverse Mortgage 11

12 Resources for more information on Equity Release/Reverse Mortgage Products: ASIC Australian Securities and Investments Commission Website: Phone: Centrelink Website: Phone: For more about Reverse Mortgages and Heartland, including articles, videos and news please visit our website. Contact Us: Heartland Seniors Finance PO Box COLLINS STREET EAST VIC 8003 Phone: Website: Australian Seniors Finance is a Licensed Credit Provider. Australian Credit Licence Numbers: Australian Seniors Finance Pty Ltd (ACN ). Credit provided by ASF Custodians Pty Ltd (ACN ) Seniors Finance Pty Ltd (ACN ) Credit provided by Seniors Finance Custodians Pty Ltd (ACN )